January 12, 2011

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Instead of notifying retailers and consumers, a plan was launched to secretly buy supplies off shelves to avoid negative publicity

Attorney General John Kroger today announced a lawsuit alleging that Johnson & Johnson and two subsidiaries exposed consumers to defective supplies of Motrin by delaying public disclosure of the problem for more than a year before finally conducting a public recall in 2010.

Instead of an immediate public recall, Johnson & Johnson and its subsidiaries allegedly attempted to quietly remove Motrin containers from store shelves. The "phantom recall" failed to notify consumers who had already purchased the defective product and exposed additional consumers by delaying public disclosure for more than a year.

"Companies that break the rules and put consumers at risk will be held accountable," said Attorney General Kroger. "This lawsuit is another example of how the Oregon Department of Justice is a national leader in combating health care fraud."

McNeil-PPC and McNeil Healthcare, subsidiaries of Johnson & Johnson, discovered in late 2008 that supplies of Motrin sold in 8- and 24-caplet containers were defective, according to the lawsuit filed Wednesday in Multnomah County Circuit Court. The containers were sold at gas stations, truck stops and convenience stores. In Oregon, the stores were scattered from the Portland area to Medford.

Company tests indicated that certain Motrin supplies failed to dissolve properly. As a result, consumers might not receive the expected dose of ibuprofen, which could lead to "a worsening of pain, fever or inflammation," according to company documents submitted to the U.S. Food and Drug Administration.

McNeil notified the FDA. But instead of disclosing the existence of the defective Motrin to the public and conducting a recall, McNeil allegedly hired contractors to go into stores in early 2009 to secretly buy the product without telling wholesalers, retailers or the public.

Buyers were instructed not to tell retailers the purpose of their purchases, according to company documents:

"You should simply 'act' like a regular customer while making these purchases. THERE MUST BE NO MENTION OF THIS BEING A RECALL OF THE PRODUCT! If asked, simply state that your employer is checking the distribution chain of this product and needs to have some of it purchased for the project."

In July 2009, one of the buyers in Oregon became concerned about the secrecy of the recall and reported the phantom recall to the Oregon Board of Pharmacy. The Oregon Board of Pharmacy notified the FDA.

Although the phantom recall came to light in mid-2009, McNeil did not announce an official recall until February 2010.

Despite the efforts of the phantom recall, a total of 787 eight-count containers of Motrin sold by Oregon retailers remain unaccounted for.

The lawsuit alleges multiple violations of Oregon's Unlawful Trade Practices Act (UTPA). Among other things, the UTPA prohibits employing unconscionable tactics, making certain false or misleading representations, or failing to disclose certain information. Each violation of the UTPA carries a maximum penalty of $25,000.

The case is being handled by David Hart, Assistant Attorney in Charge of the Financial Fraud/Consumer Protection section, and Assistant Attorneys General Merrill Maiano and Roger DeHoog.

Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, promote a positive business climate, and defend the rights of all Oregonians.